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Nam Y. Huh/AP
WASHINGTON -- The average U.S. rate on the 30-year fixed mortgage rose this week to 4.51 percent, a two-year high. Rates have been rising on expectations that the Federal Reserve will slow its bond purchases this year.

Mortgage buyer Freddie Mac said Thursday that the average on the 30-year loan jumped from 4.29 percent the previous week. Just two months ago, it was 3.35 percent - barely above the record low of 3.31 percent.

The average on the 15-year fixed mortgage rose to 3.53 percent from 3.39 percent last week. That's the highest since August 2011.

Chairman Ben Bernanke has said the Fed could slow its bond purchases this year if the economy strengthens. The purchases have kept rates low. The yield on the 10-year Treasury, which mortgage rates typically track, has been rising.

Even with the gains, mortgage rates remain low by historical standards. Low rates have helped fuel a housing recovery that is helping to drive economic growth this year.

The annual sales pace of previously occupied homes topped 5 million in May for the first time in 3 ½ years. And sales of new homes rose at the fastest pace in five years.

Greater demand, along with a tight supply of homes for sale, has pushed up home prices. It also has led to more home construction, which has created more jobs.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was 0.8 point this week, up from 0.7 point last week. The fee for a 15-year loan also rose to 0.8 point from 0.7 point.

The average rate on a one-year adjustable-rate mortgage was unchanged at 2.66 percent. The fee rose to 0.5 point from 0.4.

The average rate on a five-year adjustable mortgage rose to 3.26 percent from 3.10 percent. The fee was unchanged at 0.7 point.

The gross domestic product measures the level of economic activity within a country. To figure the number, the Bureau of Economic Analysis combines the total consumption of goods and services by private individuals and businesses; the total investment in capital for producing goods and services; the total amount spent and consumed by federal, state, and local government entities; and total net exports. It's important, because it serves as the primary gauge of whether the economy is growing or not. Most economists define a recession as two or more consecutive quarters of shrinking GDP.

The CPI measures current price levels for the goods and services that Americans buy. The Bureau of Labor Statistics collects price data on a basket of different items, ranging from necessities like food, clothing and housing to more discretionary expenses like eating out and entertainment. The resulting figure is then compared to those of previous months to determine the inflation rate, which is used in a variety of ways, including cost-of-living increases for Social Security and other government benefits.

The unemployment rate measures the percentage of workers within the total labor force who don't have a job, but who have looked for work in the past four weeks, and who are available to work. Those temporarily laid off from their jobs are also included as unemployed. Yet as critical as the figure is as a measure of how many people are out of work and therefore suffering financial hardship from a lack of a paycheck, one key item to note about the unemployment rate is that the number does not reflect workers who have stopped looking for work entirely. It's therefore important to look beyond the headline numbers to see whether the overall workforce is growing or shrinking.

The trade deficit measures the difference between the value of a nation's imported and exported goods. When exports exceed imports, a country runs a trade surplus. But in the U.S., imports have exceeded exports consistently for decades. The figure is important as a measure of U.S. competitiveness in the global market, as well as the nation's dependence on foreign countries.

Each month, the Bureau of Economic Analysis measures changes in the total amount of income that the U.S. population earns, as well as the total amount they spend on goods and services. But there's a reason we've combined them on one slide: In addition to being useful statistics separately for gauging Americans' earning power and spending activity, looking at those numbers in combination gives you a sense of how much people are saving for their future.

Consumers play a vital role in powering the overall economy, and so measures of how confident they are about the economy's prospects are important in predicting its future health. The Conference Board does a survey asking consumers to give their assessment of both current and future economic conditions, with questions about business and employment conditions as well as expected future family income.

The health of the housing market is closely tied to the overall direction of the broader economy. The S&P/Case-Shiller Home Price Index, named for economists Karl Case and Robert Shiller, provides a way to measure home prices, allowing comparisons not just across time but also among different markets in cities and regions of the nation. The number is important not just to home builders and home buyers, but to the millions of people with jobs related to housing and construction.

Most economic data provides a backward-looking view of what has already happened to the economy. But the Conference Board's Leading Economic Index attempts to gauge the future. To do so, the index looks at data on employment, manufacturing, home construction, consumer sentiment, and the stock and bond markets to put together a complete picture of expected economic conditions ahead.

Understanding Credit Scores

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Faith Yakatate

Getting a reverse mortgage for my family is the most hardest but more wiser decision we made. And believe me, over the years, even a fraction of a percent reduction in interest rates means big savings. I got help from these people.

Big deal! Interest rates went up on homes and still historically low. When the market allowed people with bad credit and no down payments to purchase a home, what did you think was going to happen? Many of the people that lost homes were nothing more than glorified renters that should have never been allowed to purchase anything because of bad credit. Our government touted living the American dream, but changed the rules so that virtual deadbeats could buy a home and they went right back to their old ways and didn't pay. Back in the day, 6% interest rates were the norm and a 20% down payment was the norm as well. People then thought twice about not paying and losing their home because they had that 20% down which they lost. Under the rules that permitted deadbeats to buy, nothing down and the rest when you catch thema dnthe bubble burst. Government has no excuse for being involved in forcing banks to lend money to those that ought not be able to borrow a dime.

"Greater demand, along with a tight supply of homes for sale, has pushed up home prices. It also has led to more home construction, which has created more jobs."? Where in the world is this going on at? Tight supply of homes? Fannie Mae alone has 190 for sale in my county, and is preparing to dump another wave of foreclosed homes onto the market here. And I don't know where whomever wrote this was refering to, but construction hasn't increased here in Florida. New Jobs? Those are our jobs and theres no work in the trades still. This is more Media Hype saying everything is going to be just fine. Brought to you by whom? Oh, Bank of America....Go Figure!

The same problem still exists. Just try qualifying for a mortgage these days. Banks are not as willing to make loans these days and take the risks. They want stellar credit, large down payments, etc. Also, many homeowners are "underwater" on their mortgages, having purchased at the height of the market and cannot put their property up for sale, thus interupting the 7 year cycle of homes coming to the market. I do see homes selling quicker than they had been due to a lack of inventory.

Do not believe everything you read/hear. It is not that bad at getting approved. In the last 24 months EVERY person that I know that tried to refi or purchase was approved. A few friends, several co-workers, 2 tenants (with a 2.5% down HUD), my sister, my daughter, me (on several properties), etc. Just takes a little longer and they are looking at things closer. The way it should have always been.

The window started to close 12 months ago (when prices were at the bottom) and now closing fast with both prices and rates going up pretty fast. In my area prices are up so much and now compound that with the higher interest rate, that same house now has a P&I payment of about 20% more than 12 months ago. Still time to get in, but the best time to buy is now far behind us.